Mayor Bloomberg yesterday lit into bodega owners who griped on the steps of City Hall that their businesses will soon go up in smoke because of a dramatic drop in cigarette sales.

Bloomberg vigorously defended the higher cigarette tax – which bodega owners said was killing their business – insisting it would stop young people from smoking.

“I just find it inconceivable that you could equate people’s lives – particularly children that buy cigarettes in bodegas – with a minor economic issue,” Bloomberg said.

“And if cigarette purchases in bodegas are down because consumption is down, that’s fantastic.”

On July 1, the city tax on cigarettes skyrocketed from 8 cents a pack to $1.50. The Post reported last week that cigarette sales had dropped from nearly 30 million packs in June to only 10.5 million in September.

“It’s not fair to target one small segment of the New York City retail economy to try to balance the budget,” said Richard Lipsky, a lobbyist for small groceries and cig maker Philip Morris.

According to Lipsky, 10,000 stores have declared bankruptcy or foreclosed this year – an all-time record high for the city.

During the protest at City Hall, about a dozen bodega owners said they are being unfairly targeted.

“I think that Bloomberg is an enemy of minority-owned businesses,” said Jose Fernandez, president of the Bodega Association, which represents about 7,000 bodega owners.

Fernandez also said small-store owners are losing out to cigarette black-market dealers.

“It’s impossible for us to compete with this illegal and criminal activity,” he said.

In another smoking-related development, James Oddo, the City Council Republican leader, yesterday asked Speaker Gifford Miller to schedule a vote on Oddo’s competing cigarette bill – which is less far-reaching than Bloomberg’s.

Oddo’s measure would ban smoking only in restaurants with fewer than 35 seats – and not bars and outdoor cafes as Bloomberg has proposed.

Oddo said he fully supported Bloomberg’s tougher bill, but wasn’t sure that one would pass quickly. “This is a step we can take immediately,” Oddo said.